Relative purchasing power parity implies a country will see its currency rise in value, if

Question

Quizplus · Accepted Answer

Relative purchasing power parity suggests that if a country's inflation rate is lower than that of a foreign country, its currency will appreciate in value compared to the foreign currency. This is because lower inflation maintains the purchasing power of the currency, making it more valuable relative to currencies from higher inflation countries.

Relative Purchasing Power Parity Implies a Country Will See Its